AU
CA
NZ
UK
US
IND
Kalkine has a fully transformed New Avatar.
In today’s daily we have covered stock research on MYOB IPO.
The S&P 500 was down by 8.20 points or 0.40% on Wednesday and closed at 2059.69 points. U.S. stocks fell on Wednesday as weaker-than-expected data spurred concerns over economic growth ahead of Friday's jobs report and first-quarter earnings. Already lagging the performance of European equities this year, the mood soured towards US stocks on Wednesday as manufacturing and jobs figures both lagged economists' expectations. The Dow Jones Industrial Average slipped 0.4 per cent to 17,698.32. TheNasdaq Composite declined 0.4 per cent to 4,880.23.
Universal Health and Express Scripts were the worst performing healthcare stocks. The sell-off was accompanied by a modest rise in volatility. The CBOE's VIX volatility index, a measure of expected moves in the S&P 500 over the coming month, climbed 1.2 per cent to 15.11. A decline in US oil production and a slower build in inventories helped oil slick higher. GE chief executive Jeffrey Immelt has joined the corporate backlash in America against legislation in Indiana that critics say would allow businesses to discriminate against gay & lesbians. The stronger dollar and lower oil prices are colliding to form a gloomy picture for earnings, especially for multinational and energy companies. First-quarter earnings for companies in the S&P 500 are expected to fall 4.8% from a year earlier, according to FactSet. GoDaddy Inc. shares rose 31% above their initial public offering price in their market debut Wednesday. GoDaddy priced its IPO above expectations on Tuesday, at $20 a share.
S&P 500 Daily Chart (Source - Thomson Reuters)
S&P ASX 200 was down by 30.70 points or 0.52% on Wednesday and closed at 5860.80 points. BHP led the diggers lower as it fell 2.2 per cent and Rio dropped 1.4 per cent. Falling oil prices hurt the drillers, with Woodside 1.9 per cent lower and Origin down 3.3 percent. Banks were lower, as were the major supermarket owners Woolies and Wesfarmers, although Macquarie jumped 1.2 per cent. Telstra and the healthcare stocks enjoyed a boost, with CSL climbing 0.6 per cent.
Among the best and worst performers was Ansell, up 4.9 per cent on an acquisition, while UGL dropped 5.5 per cent after the Victorian government cancelled a project. Chineseiron ore futures dropped a sixth straight session to hit a contract low on persistent worries that output cuts at steel mills would eat into demand for the raw material. Emerging graphite producer Triton Minerals negotiated a $2 billion long-term off-take agreement, triggering a near doubling in its share price.
Macquarie Daily Chart (Source – Thomson Reuters)
Get up to 2 Years of free subscription by inviting your friends to KALKINE!
For every friend of yours who joins KALKINE, we'll give you 3 months of free subscription (up to a limit of 24 months free subscription). If you recommend 3 friends and they join within a month of you referring them, you get 1 year free subscription to KALKINE reports added to your account (up to a limit of 24 months free subscription). Simply reply to this email with their name, e-mail and phone number.
Stock Of The Day - MYOB
MYOB - IS IT AN OPPORTUNITY TO SEIZE THE MOMENT FOR FUTURE?
It has been a few days only that MYOB Group Limited (MYOB), one of Australia and New Zealand’s leading accounting software provider, has been in the news with regards to lodging of its Prospectus with the ASIC for an initial public offering (IPO) and listing on ASX of its fully paid ordinary shares. This is expected to raise total proceeds of A$831.7 to A$833.8 million at an indicative price range of A$3 – A$4 per share. Accordingly, the Company expected to have a total enterprise value of about A$2.34 to A$2.69 billion. This is indicative of 20.6 times to 24.9 times proforma net profit after tax and amortisation for the year to June 2016 with a probable dividend yield of 2.8% to 3.3% for the 12 months ending 30 June 2016.
Financial Highlights of FY2014 (Source – Company Reports)
The market suspects that a successful IPO may help the Company to be the year’s largest float to-date. MYOB is expected to be listed on ASX in May 2015. A portion of the proceeds will be applied for debt reduction. MYOB expects that the IPO may cost $51.8 million including $41.4 million in fees to advisers and other transaction costs. Bain Capital, which is the Company’s largest shareholder, has been reported to hold about 57% of MYOB’s shares on listing.
Pro Forma Forecast and Statutory Cash Flows for 1H2015 and 1H2016 (Source – Company Reports)
It is also important to note that Xero, MYOB’s competitor, has claimed that MYOB’s prospectus for its $2.7 billion listing lacks few competitive details (such as details relating to count of customers across Australia and New Zealand) for investors. Xero stated that it has about 200,000 paying customers in Australia out of a total customer base of 400,000, with 119,000 in NZ and 61,000 in Britain.
Principal Participants in the Australia and New Zealand SME Software Market (Source – Company Reports)
On the other hand, MYOB in its prospectus stated that it has 505,000 paying clients across Australia and NZ with 116,000 being cloud-based customers who pay a subscription. It has a further 716,000 non-paying customers using the desktop software. Thus, Xero’s claims have been considered as an extreme and inaccurate form of criticism as per MYOB’s management.
Divisions and Product Suite (Source – Company Reports)
The Company is returning to the ASX after six years of private ownership which proffers an opportunity for shareholders. MYOB has reported to have a robust base with 67% of new clients opting for cloud products. The Company leads in the SME Software Market by users comprising about 60% to 65% of the total number of Accounting Software users. The Company’s last year’s revenue attributed to 60% to 65% of total revenues in the Practice Software Market. Then, 15% of its revenue last year comprised about 15% of total revenues in the Enterprise Software Market.
Historical Composition of MYOB’s Revenue (Source – Company Reports)
MYOB has an SME user retention rate in FY2014 of 81% which is an increase from 78% in FY2011. 83% of MYOB’s revenue is reported to emanate from Australia with the remaining coming from NZ. The Company maintained a recurring revenue swelling from 89% of total pro forma revenue in FY2012 to 94% in FY2014. The pro forma revenue rose at a CAGR of 8% between FY2012 and FY2014, and the pro forma EBITDA margin at above 40% between FY2012 and FY2014. These aspects are indicative of high cash generation with an interesting financial profile. Of course, the spat between the competitors would be eyed closely in terms of growth and performance.
MYOB R&D Spending in $ millions (Source – Company Reports)
Overall, it seems that MYOB has been running up a transformational ladder while delivering innovative cloud solutions for SMEs and partners that has helped the Company deliver double digit revenue and profit growth.
Level 13 167 Macquarie Street
Sydney NSW 2000 Australia
E-Mail - [email protected]
Phone - 02 8667 3147
Note - You can also view this daily in the special reports section.
Please wait processing your request...